EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.

(San Francisco, CA) - PG&E
Corporation (NYSE:PCG) today filed a motion transferring the lawsuit
filed against it by the California Attorney General from San Francisco
Superior Court to the Northern District U.S. Bankruptcy Court. The
transfer is effective immediately.

"The attorney general's
complaint is without merit, and clearly appears to be part of his
ongoing efforts to obstruct our utility's plans for emerging from
bankruptcy," said Bruce Worthington, Senior Vice President and General
Counsel for PG&E Corporation. "It makes sense for the complaint
to be moved to Bankruptcy Court, which has original and exclusive
jurisdiction of claims involved in the bankruptcy process and participation
in that process."

The attorney general's complaint
alleges that PG&E Corporation and its directors made improper use
of the Bankruptcy Court by virtue of PG&E Corporation's co-sponsoring
of the pending Plan of Reorganization. It also seeks restitution
of assets allegedly wrongfully transferred to PG&E Corporation from
Pacific Gas and Electric Company.

"While both allegations
are patently absurd, both provide grounds to transfer this case
to Bankruptcy Court," said Worthington.

The financial transactions
cited by the attorney general have been thoroughly reviewed and
audited multiple times - by the California Public Utilities Commission,
and by the state Legislature - with no findings that the transactions
were anything but entirely appropriate and legal.